If a Market Proxy Portfolio Consistently Beats All Professionally Managed

question 21

Multiple Choice

If a market proxy portfolio consistently beats all professionally managed portfolios on a risk-adjusted basis,it may be concluded that

• A)the CAPM is valid.
• B)the market proxy is mean/variance efficient.
• C)the CAPM is invalid.
• D)A and B.
• E)B and C.

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Definitions:

Motivate

To provide someone with a reason or incentive to do something.

Reinforcement

A concept in behavior psychology where the frequency of a behavior is increased by following it with a reinforcement, which can be positive or negative.

Externship

Employee development through a full-time temporary position at another organization.

Technical Analyst

A professional who evaluates investments, identifies trends, and predicts future price movements in financial markets based on historical data and technical indicators.